U.S. SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 21483 / April 9, 2010

SEC CHARGES MINNESOTA INVESTMENT ADVISOR WITH FRAUD

On April 8, 2010, the Honorable Donovan W. Frank of the United States District Court for the District of Minnesota issued a temporary restraining order and asset freeze against Renee Marie Brown (Brown), a Minnesota-based investment adviser, and Investors Income Fund X, LLC (Fund X), a company formed and controlled by Brown.

The SEC alleges that Brown misappropriated advisory clients' money. The SEC alleges that from July 2009 through March 2010, Brown fraudulently raised more than $1.1 million from six investors by convincing them to transfer their money to Fund X. The SEC alleges that Brown told her investors that Fund X is a "bond fund" with fixed annual returns of 8% or 9%. The SEC alleges that she distributed fictitious "returns" to investors, furthering the fiction that Fund X was a legitimate and successful investment opportunity. The SEC alleges that, unbeknownst to her victims, Fund X is a sham — Brown's alter ego. The SEC alleges that Brown misappropriated most of the $1.1 million she raised from investors to, among other things, purchase a condominium for herself and build-out office space for her new business.

The SEC's complaint charges Brown and Fund X with violating Sections 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges Brown with violating Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.

The SEC's complaint seeks permanent injunctive relief and disgorgement from the Defendants, and civil penalties from Brown.